Correlation Between Séché Environnement and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Séché Environnement and ORMAT TECHNOLOGIES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Séché Environnement and ORMAT TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sch Environnement SA and ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Séché Environnement and ORMAT TECHNOLOGIES and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Séché Environnement with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and ORMAT TECHNOLOGIES.
Diversification Opportunities for Séché Environnement and ORMAT TECHNOLOGIES
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Séché and ORMAT is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES and Séché Environnement is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sch Environnement SA are associated (or correlated) with ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of Séché Environnement i.e., Séché Environnement and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Séché Environnement and ORMAT TECHNOLOGIES
Assuming the 90 days horizon Sch Environnement SA is expected to generate 1.16 times more return on investment than ORMAT TECHNOLOGIES. However, Séché Environnement is 1.16 times more volatile than ORMAT TECHNOLOGIES. It trades about -0.02 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.02 per unit of risk. If you would invest 10,004 in Sch Environnement SA on October 16, 2024 and sell it today you would lose (2,264) from holding Sch Environnement SA or give up 22.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Séché Environnement |
| ORMAT TECHNOLOGIES |
Séché Environnement and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Séché Environnement and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché Environnement position performs unexpectedly, ORMAT TECHNOLOGIES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES's long position.| Séché Environnement vs. 24SEVENOFFICE GROUP AB | Séché Environnement vs. USWE SPORTS AB | Séché Environnement vs. PLAYWAY SA ZY 10 | Séché Environnement vs. PLAYTIKA HOLDING DL 01 |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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